Financial Management Strategies for Retail Industry in India-a Case Study of Retail Scenario in Hyderabad and Secunderabad free essay sample

FINANCIAL MANAGEMENT STRATEGIES FOR CORPORATE RETAIL INDUSTRY IN INDIA-A CASE STUDY OF RETAIL SCENARIO IN HYDERABAD AND SECUNDERABAD SYNOPSIS IINTRODUCTION: (1) Retail Industry in India The Indian retail industry is the largest among all the industries, accounting for over 10 per cent of the country’s GDP and around 8 per cent of the employment. The retail industry in India has come forth as one of the most dynamic and fast paced industries with several players entering the market. But all of them have not yet tasted success because of the heavy initial investments that are required to break even and compete with other companies. The Indian retail industry is gradually inching its way towards becoming the next boom industry. A large young working population with median age of 24 years, nuclear families in urban areas, along with increasing working-women population and emerging opportunities in the services sector are going to be the key factors in the booming growth of the organized retail sector in India. We will write a custom essay sample on Financial Management Strategies for Retail Industry in India-a Case Study of Retail Scenario in Hyderabad and Secunderabad or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page The growth pattern in organized retailing and in the consumption made by the Indian population will follow a rising graph helping the newer businessmen to enter the Indian retail industry. In India the vast middle class and its almost untapped retail market are the key attractive forces for global retail giants wanting to enter into newer markets, which in turn will help the retail industry in India to grow faster. As per a McKinsey report, Indias overall retail sector is expected to rise to US$ 833 billion by 2013 and to US$ 1. trillion by 2018, at a compound annual growth rate (CAGR) of 10 per cent. As a democratic country with high growth rates, consumer spending has risen sharply as the youth population (more than 33 percent of the country is below the age of 15) has seen a significant increase in its disposable income. Consumer spending rose an impressive 75 per cent in the past four years alone. Also, organised retail, which accounts for almost 5 per cent of the market, is exp ected to grow at a CAGR of 40 per cent from US$ 20 billion in 2007 to US$ 107 billion by 2013. According to the Investment Commission of India, the overall retail market is expected to grow from US$ 262 billion to about US$ 1065 billion by 2016, with organised retail at US$ 165 billion (approximately 15. 5 per cent of total retail sales). India is expected to be among the top 5 retail markets in the world in 10 years. The future of the retail industry in India looks promising with the growing of the market, with the government policies becoming more favorable and the emerging technologies facilitating better operational efficiencies.. (2) Retail Scenario in Hyderabad and Secunderabad Retail forms a large part of the business sector in Hyderabad and Secunderabad both in terms of establishments and employment . The burgeoning retail outlets in Hyderabad and Secunderabad are evidence of the immense potential that these twin cities offer for business. The emergence of Hyderabad as the preferred destination for the IT and ITES industry in recent times has brought with itself the cascading effect on other industries like retail and real estate. Big corporates like the Mukesh Ambani led Reliance Industries, the Kishore Biyani led Future group etc. ave made substantial investements and are ready to invest more in the Hyderabad retail industry. The retailing industry in Hyderabad has come into big Shopping Malls, and huge departmental stores and retail chains like Big Bazaar, Shopper Stop, and Metro, Hyper Mart etc.. The employment opportunities in Hyderabad retail are highly increased, and have good financial rewards also. In the next two years thousands of jobs will be generated in this sector. Innovative retail formats like Integrated retailing, retail cum entertainment is booming at a great pace in the Hyderabad city, e. . , Big Bazar combines with Big Cinemas, Hyderabad Central with PVR Cinemas and GVK Mall with INOX etc. Overall, the Hyderabad retail business sector has large opportunities for prospective business houses. With the retail sector generating fair profits in Hyderabad and Secunderabad, it would be beneficial for investors to tap it exactly in the manner in which they want. (3) Impact of the Retail Industry on the social and economic environment The boom in the Indian retail sector has impacted a change in the lifestyle of the Indian consumers drastically. The evident ncrease in consumerist activity is colossal and this has already created a money making recess for the Indian organized retail sector. What’s more, this growth trend in retail industry in India is not just a steady one but also one that is displaying exponentia l characteristics. With the onset of a globalized economy in India, the Indian consumers psyche has been changed. People have become aware of the value of money. Nowadays the Indian consumers are well versed with the concepts about quality of products and services. These demands are the visible impacts of the Indian organized retail sector. The social changes with the rapid economic growth due to trained personnel, fast modernization, enhanced availableness of retail space are the positive effects of liberalization. The growth factors of organized retail in India are:- †¢Increase in per capita income which in turn increases the household consumption †¢Demographical changes and improvements in the standard of living †¢Change in patterns of consumption and availability of low-cost consumer credit †¢Improvements in infrastructure and enhanced availability of retail space †¢Entry to various sources of financing The non-food sector, segments comprising apparel, accessories, fashion, lifestyle products felt the significant change with the emergence of new stores formats like convenience stores, mini marts, mini supermarkets, large supermarkets, and hyper marts. Even food retailing has become an important retail business in the national arena, with large format retail stores, establishing stores all over India.. India will be a unique business arena in the whole of the global economy, for the social and economic parameters that would overrule the big bang of the vivid competition. (4) Financial Management Taking a commercial business as the most common organisational structure, the key objectives of financial management would be to: †¢ Create wealth for the business †¢ Generate cash, and †¢ Provide an adequate return on investment bearing in mind the risks that the business is taking and the resources invested. There are three key elements to the process of financial management: (a) Financial Planning Management needs to ensure that enough funding is available at the right time to meet the needs of the business. In the short term, funding may be needed to invest in equipment and stocks, pay employees and fund sales made on credit. In the medium and long term, funding may be required for significant additions to the productive capacity of the business or to make acquisitions. (b) Financial Control Financial control is a critically important activity to help the business ensure that the business is meeting its objectives. Financial control addresses questions such as: †¢ Are assets being used efficiently? †¢ Are the business’ assets secure? †¢ Does management act in the best interest of shareholders and in accordance with business rules? (c) Financial Decision-making The key aspects of financial decision-making relate to investment, financing and dividends: †¢ Investments must be financed in some way – however there are always financing alternatives that can be considered. For example it is possible to raise finance from selling new shares, borrowing from banks or taking credit from suppliers †¢ A key financing decision is whether profits earned by the business should be retained rather than distributed to shareholders via dividends. If dividends are too high, the business may be starved of funding to reinvest in growing revenues and profits further. Finance which acts as the lifeblood in the modern business types is one of the most important considerations for an entrepreneur-company. While implementing, expanding, diversifying, modernizing or rehabilitating any project the meaning of finance is better understood. From an organizational point of view, the process of financial management is associated with financial planning and financial control. Financial planning seeks to quantify various financial resources available and plan the size and timing of expenditures. Financial control refers to monitoring cash flow. Inflow is he amount of money coming into a particular company, while outflow is a record of the expenditure being made by the company. Managing this movement of funds in relation to the budget is essential for a business FINANCIAL MANAGEMENT AND THE RETAIL INDUSTRY Financial performance is vital to competitive success. It is a factor that can either enhance the competitive standing of the company or lead it to destruct ion. Businesses are ultimately judged on their ability to perform financially. Domestic growth, international expansion, strategic repositioning, are the strategic decisions to be taken. But each of these is punctuated by the need to generate corresponding financial returns. Understanding the drivers of financial performance, their roots, and causes is a must for sound retail management. As retailing is an intensely cash generative business, an important characteristic of any retail operation is the ability to recycle cash received from sales. Generally in any cash conversion cycle, the interaction between the three components of cash tied up in inventory, cash tied up in receivables and payables is examined. However in the retail industry, cash from receivables is not a concern since most of the sales are made in cash. Hence the cash conversion cycle in a retail setup is a result of the interaction between the cash tied up in inventory and the payables. While payables can be predicted easily, the challenge lies in minimization of the inventory to cash conversion cycle. This requires constant monitoring of the amount blocked in inventories. A major component of the retail balance sheet is inventory and the industry average for the retail sector is 27% of the total assets. The Retail sector thus has a peculiarity in its fund requirement since there is a greater need for short term finance rather than long term or medium term finance. Another large component is the property, plant and equipment. Usage of the retail space in the most effective and profitable manner is what sets apart a successful retailer. This is the reason why the profit per square foot is regarded as an important measure of performance evaluation of a retail outlet. Managing a retail business is a little like riding a bike—there are going to be strenuous uphills, effortless but hazardous downhills and demanding stretches in between. How this ride is handled is based on the ability to keep the wheels moving by combining judicious pedaling with knowing when to shift gears quickly and skillfully while maintaining balance. If we compare a retail business to the two wheels of a bicycle, one wheel is the sales wheel and the other one is the working capital wheel. Financial management in the retail sector is the art of achieving perfect co-ordination between the two so that the ride is smooth and the organization can move ahead. FINANCIAL MANAGEMENT STRATEGIES-CONSIDERATIONS Financial strategy, as a functional strategy, is subject to the overall corporate strategy. Therefore, financial strategy includes profit distribution strategy, investment strategy, financing strategy and legal relations strategy. The strategy must accommodate the interests and needs of company owners, management and customers as much as possible. Since these interests differ from company to company, the financial strategy too differs. The considerations for framing a financial strategy are as under: a)Analysis of the external environment of the company )Key stakeholders’ expectations and objectives related to the company c)Analysis of internal environment of the company d)Analysis of the company’s customers e)Analysis of the company’s competitors f)Analysis of the company’s resources g)Analysis of the company’s suppliers h)Analysis of the functional strategy of the company i)Marketing RD IS/IT strategy II NEED FOR THE STUDY There have been a lo t of players who have crafted the Indian retail success story, and a few that have closed or closing their shop. There is thus an absolute need for research in the field of financial management strategies, and to formulate informed suggestions for Improvements and cautions for the retail industry in India. The booming retail business is attracting a number of corporate players from within India and also those from outside India. This would involve a huge investment by the corporate players and a wrong strategy would lead to erosion of capital and loss of employment. The performance of the successful players is lending credence to the growth figures projected as per the above studies. Reliance Retail has set up 700-plus stores in the past two years, almost at the rate of one store per day, Future Group has begun opening a new no-frills discount retail chain called KB’s Fair Price Stores, a format that is similar in concept to Subhiksha stores. Reliance’s food and grocery format Reliance Fresh on the other hand is high-end in terms of display, ambience and size. However in the midst of the success stories of the Big Bazaars, Reliances and the Walmarts, we have the case of a home-grown ‘Subhiksha’ which went sour. If the reasons for the downturn in Subhiksha were analysed, what starkly stands out is that poor funds management was responsible for bringing down the organisation. It is thus evident that financial management is the crux of retail business. Since the retail sector is fast expanding and highly competitive, there is a need for studying financial management strategies which will result in sustained and profitable operations of an organization successfully weathering the vagaries of economic conditions. In a retail setup the changes in the external and internal environment are more frequent and there is a need to continuously look out for indicators that signal need for change in strategy. Consequently there is a need for constantly revisiting and reviewing existing strategies in order to meet challenges. Financial analytics comes out as one of the major decision making parameters and success factors. The social and economic impact of retail industry is too pronounced to be ignored or made light of. The positive impact of a successful financial strategy in a retail setup augurs well for employment generation and wealth creation. The reverse happens when a financial strategy fails and the retail company crumbles. In the present day scenario of reeling economic recession/correction, it is very important to have financial management strategies that will not only result in profit maximization and wealth maximization but more importantly will not result in loss or erosion of investors’ capital or employment opportunities. It is because of this requirement that this study is being taken up. IIIREVIEW OF LITERATURE 1. Case Study- Subhiksha: A Saga of Ups and Downs- by Bindu Rathore This study starts from the very beginning of the concept on which Subhiksha was ormed and studies the journey of the organization right from tracing its astronomical growth to its downfall. As per the study, the retailer was a trendsetter in many ways not only for the speed with which it was adding stores but the revenue model on which it worked. It promised the customer the most optimum prices and for this it applied a different supply chain management methodology. It would source items for cash and obtain maximum discounts that were passed on to the customer. Since this inventory would need some time to get converted into cash again, it would stock only the fastest moving stocks. This was the USP (Unique Sales Proposition) of the organization. With this sales ideology, the company turnover grew from Rs. 330 crore in 2005-06 to Rs. 833 crore in 2006-07 and then to Rs. 2,305 crore in 2007-08. The number of stores grew from 150 stores in September 2006 to 2300-odd stores in the year 2008-09. The inside story was that the rate of expansion was too fast for the funds in hand. By the time, the management realized this, global markets fell and there were no chances of raising capital. The company became unable to tie up funds even for ongoing operations like wages, inventories and advertising expenses etc. Apart from this it was also reportedly carrying a debt of Rs. 700 crores at an average interest cost of 12% per annum. That slowly started choking and led to paralysis of operations completely. 2. News report in the Wall Street Journal on 26th May 2009. A cash crunch and slowing consumer demand not only forced retailers to shut stores and stall expansion plans, it also set back makers of home and personal care products that had hoped to widen their sales reach through chain stores. Companies such as Hindustan Unilever Ltd (HUL) and Marico Ltd and Wipro Ltd’s consumer products division say the contribution of retail chains to their sales declined significantly in the two quarters ended March from the year-ago period. â€Å"The economic downturn that resulted in a liquidity squeeze, coupled with the decline in consumer sentiment and spending, hit the modern retail business. As a result, some FMCG (fast-moving consumer goods) companies are not generating enough sales and inventories are piling up ,† said Asitava Sen, director, retail consulting, at Nielsen Co. , the market research firm. In some exceptional cases, payments have not been made on time. † HUL’s managing director and chief executive officer Nitin Paranjpe cited slower growth in modern trade as one of the reasons for a decline in the company’s sales volumes Wipro Consumer Care and Lighting (WCCL) said sales growth through chain stores had slowed. The rapid growth of re tail chains in 2006-07 had encouraged consumer product makers to chart strategies to take advantage of that boom. Some, such as Wipro, GlaxoSmithkline Consumer Healthcare Ltd and Marico, set up separate teams to drive sales through modern retail outlets. Several others changed their packaging and even pricing to suit the new retail format’s needs and some offered higher margins to organized retailers. IV OBJECTIVES OF THE STUDY The current study titled â€Å"Strategies for Financial Management in the corporate retail industry in India† is being undertaken mainly with the following broad objectives in mind: 1. To suggest a management information system framework that will aid in formulating financial policies of a retail organisation in the Indian business environment. 2. To examine the impact of product service mix, consumer segment, format mix, geographical market strategies on the financial performance of the organisation and suggest financial management strategies for improvement of financial performance of retail organisations. 3. To study the factors responsible for the failures of certain retail organisations and analyse them. The findings would be useful to rationalise ways and means for timely implementation of or alteration to business strategies followed in a retail organisation. 4. To suggest review methodologies for business strategies to ensure adaptability to changing economic environment. . To compare the impact of the financial management framework in the retail organisations vis-a-vis organisations in other sectors like information technology , telecom etc.. 6. To suggest early warning mechanism through financial analytics. In brief, the purpose of the current study is to undertake detailed research of the impact of various business strategies used in the selection of the segment, the geographic location, the revenue model and other business decisions on the performance of a retail organization and to analyse the impact of these decisions on the financial strategies of the organization to ome out with informed and rational deductions. The study would also examine various existing financial management strategies of the organizations and their impact on the performance of the organization and suggest improvements in financial strategies for enhancing business performance. V HYPOTHESIS We have set a few hypotheses for the abovementioned study. The first hypothesis is that the economic conditions will either remain the same or will improve but will not deteriorate. Second, all the retail players will be impacted by the economic conditions in the same manner and respond to similar financial policies in a similar manner. Third, there could be differences between the performances of the retail players based on the p roducts dealt with. Fourth, we would not have access to the confidential data of the sample organizations taken up for study due to strategic reasons. VI RESEARCH METHODOLOGY Sample: A sample of three organisations in the retail sector in the twin cities of Hyderabad and Secunderabad would be selected as a sample for this study. The organisations proposed to be taken up as samples for this study are as under: 1. Reliance Fresh 2. Big Bazaar . Pantaloon Retail A minimum of three department heads would be selected and a survey of the target respondents would be taken to analyse the financial needs of the organisation and the financial management policies being followed. Primary source of information would be the survey conducted on the respondent population through questionnaires and personal interviews. Secondary source of information would be review of Journal and websites on Financial Management, Retail Management, like www. retailowner. com, www. economywatch. com etc. Financial information from General purpose financial statements available in the public domain like websites of the respective organisations, annual reports, and news articles published in financial newspapers and magazines. VII PERIOD OF STUDY On an average 3 years financial and operational data in each organization will be studied for arriving at a conclusive result of the current study. VIII IMPLICATIONS OF THE STUDY The findings of the current study would be useful to the various corporate players, both Indian and Global companies in the retail industry in India. The study would also be helpful to the stakeholders and also the small investors in such retail organizations in India. It would also help in developing a comprehensive research agenda around identified themes which include: (i) financial planning methodologies for the retail organisations; (ii) strategies for category optimizations to optimize performance management of the retail organizations; and (iii) Strategies for category optimization through Revenue Management. IXREFERENCES 1. Retail Management- Perspectives and Cases by V. V. Gopal 2. Retail Strategy- the view from the bridge- by Jonathon Reynolds and Christine Cuthbertson 3. Economic times- a financial daily 4. Wall Street Journal- e –newspaper 5. Retail Owners Institute website-www. retailowner. com .

Macroeconomics Student Resource Center

Macroeconomics Student Resource Center This page contains links to the articles and links pages hosted on Economics at About.com. Most of the major topics in macroeconomics have at least one article associated with them, but this is a work in progress and more will be added every month. Most of the articles come from questions from readers, so if you would like to ask a question about macroeconomics, please use the feedback form. Be sure to also visit the Economics Glossary if youre looking for definitions, and Economics From A-to-Z for resources on other topics. The pages Macroeconomics Tips and Tricks and Macroeconomics Resources contain many links to other pages which contain macroeconomics information, so if what youre looking for is not here, Id suggest trying there. Term paper tips and topics can be found at Economics Term Paper Help. If you need practice economics questions, Test Yourself Macroeconomics (offsite) is the site to visit. Now to the resources! Business Cycles - Macroeconomics Beginners Guide to Economic Indicators and the Business CycleBusiness Cycle Links Economic Data - Macroeconomics Quarterly Economic DataImport and Exports Data Economic Growth - Macroeconomics The Effect of Income Taxes on Economic Growth Economic Indicators - Macroeconomics Beginners Guide to Economic Indicators Exchange Rates - Macroeconomics A Beginners Guide to Exchange RatesExchange Rates: What to Use as the Base?The Canadian Exchange Rate Financial Markets - Macroeconomics How Markets Use Information to Set PricesStock Market Resource CenterInsider Trading: What Did Martha Do?Interpreting The Price/Earnings RatioDo Changes in Stock Prices Cause Recessions?What Does The Value of the Dow Jones Represent?What is Arbitrage?When Stock Prices Go Down, Where Does the Money Go?Banking in IndiaFinance LinksStock Market Links Fiscal Policy The Logic of Collective Action Inflation and Deflation Cost-Push Inflation vs. Demand-Pull InflationDeflation Resource CenterWhy Dont Prices Decline During A Recession?What is Deflation and How Can It Be Prevented?Why Not Just Print More Money?Inflation Links Interest Rates The Dividend Tax Cut and Interest RatesInterest Rate Links Monetary Policy Expansionary Monetary Policy vs. Contractionary Monetary PolicyWhy Not Just Print More Money?Federal Reserve Links Money Money Resource CenterWhat Was The Gold Standard?What Is The Demand For Money?How Much Is The Per-Capita Money Supply?Why Does Money Have Value?Are Credit Cards a Form of Money?What is Arbitrage?When Stock Prices Go Down, Where Does the Money Go?Why Not Just Print More Money?Money Links Natural Resources We Will Never Run Out of OilSoftwood Lumber Dispute Resource Center Nominal and Real Variables The Difference Between Nominal and Real Recessions and Depressions Why Dont Prices Decline During A Recession?Do Changes in Stock Prices Cause Recessions?The Difference Between a Recession and a Depression Short Run vs. Long Run The Difference Between Short and Long Run Tariffs and Trade The Economic Effect of TariffsDoes Freer Trade Lead To Lower Environmental Standards?Softwood Lumber Dispute Resource CenterImport and Exports DataWhy Are Tariffs Preferable to Quotas? Taxes Fair Tax Resource CenterThe Effect of Income Taxes on Economic GrowthThe Dividend Tax Cut and Interest RatesTax Policy LinksWhy Are Tariffs Preferable to Quotas?The Economic Effect of Tariffs

Sustainable Management Futures Assignment Example | Topics and Well Written Essays - 1500 words

Sustainable Management Futures - Assignment Example â€Å"Let Capitalism Rip†, in the speech of British Prime Minister David Cameron signifies the dominance of capitalism in the society which concentrates on demolishing the free market. According to Prime Minister David Cameron, the popular capitalism should allow everyone to share in the success of the market. The Prime Minister also includes in his speech the social responsibilities of the firms and to prevent the abuse of the policies that have been conducted by the organisations to gain larger profitability as well as competency (BBC, 2012). To be precise, Prime Minister David Cameron, by making counterarguments over chronic capitalism practiced in UK documented the need for free market considerations not only on profit maximization but also toward Corporate Social Responsibilities (CSR). With due consideration to the aspect of capitalism and market labours, the government intends to enforce the policies toward the determined poverty level, ecological demolition, fundamenta l inequalities of wealth, and concentrated power in the hands of corporation, and property-owner among others (Charter & Johnson, 2011). The labour economics from a free market perspective signifies that the labours in the economy are based upon the three crucial factors of production which are recognised as land, labour and capital that generates the massive part of the annual GDP of the country. Therefore, the traders as well as the government in the United Kingdom provide significant consideration towards these issues of labours in the economic stature of the country (Block, 2008). In this regards, the speech of Prime Minister Cameron indicates to build a better and structured economy, so that the country along with its citizens can be benefitted in the free market, in terms of avoidance towards economic crisis and other similar challenges including poverty as well as power and wealth distribution (BBC, 2012). The proposal put forward by Prime Minister David Cameron in this speec h elaborates on the proper utilization of the human resources (labours) and other natural resources signifying a free rein perception within the market moving ahead against the traditional approach and â€Å"Let Capitalism Rip†. In the context of his speech about the dominance of capitalism in the entire business society of UK and its impact on the economic structure of the country, the moral highlighted was to apply the basic fair market approach in the business environment (Charter & Johnson, 2011). Prime Minister David Cameron, in this regard, stated that capitalism can be one of the strongest tools for development of the country’s financial structure, involving wealth creation as well as social responsibilities that was ever recognized. An effective capitalism insists the proprietors of intellectual property rights along with the economic property rights facilitating them to earn a profit as a reward for investing the capital at risk in a suitable form of free mark et financial activity (Norman, 2011). Capitalism is not only concerned about the economic and social conditions, it also be acquainted with its morals. The notion of capitalism involves morality as it considers a few auspicious demands, such the individual freedom based on personal principles, the assets of hard work and creativity, the social exchange regarding effectiveness of the traditions and intellectual practices along with government’

An Economist's Account of the Existence of Moral hazard in the Essay

An Economist's Account of the Existence of Moral hazard in the healthcare sector, and describe the mechanisms necessary to tac - Essay Example However, it is argued that the existence of the excessive utilization of these systems is due to the absence of a financial barrier to control the demand, and presence of financial arrangements on the supply side, which enables providers to supply wasteful amounts. Generally, unregulated, competitive markets result in private health insurance, which contributes to the concept of more insurance, which helps reduce health risks, but at the same time, increases demand and cost. In this regard, Nyman (2003) argued that most economists view the idea of controlling the supply side as a possible way of alleviating this problem. With such deliberations, it has been difficult for both the policy makers and economists to measure the level of demand and supply considered ideal in the market. In light with this, initiatives have been formulated in order to counteract moral hazard. Consumer moral hazards counter policies In order for policies to respond to consumer moral hazards, various issues h ave to be put into consideration without necessarily focusing on financial ones. The use of primary-care doctors as the gateway to preventing overuse of hospital services has been endorsed by many high income countries (Culyer and Newhouse 2000). On the other hand, the same modality has been endorsed by lower income countries by way of using bare-foot doctors. Nevertheless, numerous measures have been designed to counteract consumer moral hazards. Co-payments Co-payments have been utilized by a number of countries to exert some financial burden on the consumer in order to discourage unnecessary use of health care. This involves several schemes, which differ on the basis of the financial arrangement (Sexton 2010). Nevertheless, individual scheme is composed of flat rate change for each unit of service, a deductable akin to excess, and co-insurance. One of the most notable contributions of co-payments comes from the famous health insurance implement (HIE). In this particular experimen t, families that participated in the experiment were randomly assigned one of the different free-for-service insurance plans. The free for service plans involved different levels of cost sharing. Covered expenses included most medical services. Another set of the plan involved free access to inpatient services. The outcome of the experiment indicated that utilization responds to amounts paid out of pocket. Per capita total expenses on the free recorded 45 percent higher than those on the plan with a 95 percent co-insurance, however, spending rates on the rest of plans was on average. On the other hand, outpatient expenses on the provided free plan recorded an increase of 67 percent higher than those on the 95 percent co-insurance plan. The findings from this experiment indicated that an increase in the user price will lead to a decrease in demand. In this regard, it is apparent that implementing charges would lead to doctors concentrating more on those who can afford to pay (Sexton 2010). However, the implication is that those more in need tends to have less access to services. This becomes the problem of the approach advocated by RAND study. This is arguably true because in aggravate, the figure of those more in need of service and able to pay is replaced by those less in need and unable to pay. The other important issue of concern is whether the response of demand for health care to adjustment in its prices is the same or different for several groups in society (Nyman 2003). It is also necessary to

Satisfaction level of retailers and the visual merchandising

Satisfaction level of retailers and the visual merchandising This chapter is a review of the central theoretical literature of satisfaction level of retailers and the visual merchandising and its impact on consumers buying behaviour which ultimately leads to increase in the margin of the retailers. The first part of this chapter deals with the most popular brand of PepsiCo and the satisfaction level of retailers with respect to per product margin. The second chapter examine the planogram norms of the company and it tries to find out whether or not the retailers follow it properly. The third and last part of the chapter examines the effectiveness of Visual Merchandising and its effectiveness on consumers buying behaviour. All these objectives/problems have been examined in the light of academic literature and some of the facts have been supported by the data taken form the company i.e., Pepsico. To find out the most popular brand of PepsiCo the satisfaction level of its retailers Most of the manufacturers of consumer goods including PepsiCofrequently use intermediaries to sell their products to the final consumer. Intermediaries such as big and small retailers have substantialstimulus over the marketing of these goods and hence over the ultimate consumer choice (Laland Narasimhan, 1996). Even PepsiCo is one of the largest networks of retailers in India (PepsiCo, 2010). The consumer goods retail market is characterized by intensivecompetitionamong retailers competing for a share of the consumers money (Albion and Farris, 1982). Retailers, generally, carry so many products, and on any given purchase occasion a typical consumer buys a subset of the vast number of items a retailer has on its shelf. Generally consumers are ignorant or uninformed about the prices of all the products they want to buy and subsequently select a retailer to shop at based on the advertised prices of a subset of the products they desire to buy. Given this, retailers tend to compete more aggressively based on the prices of a selected set of items by advertising these prices to consumers (Agustin Singh, 2005). It means that these retailers will sell more products of only those company which tries to make them happy through more or heavy margin.The items that the retailers select to compete on are those that most consumers de-sire and value highly. Since the profit from any cust omer is the sum of profits from advertised and un-advertised items, the intensity of retail competition, as evident from the prices of these items, increases with the amount the consumer will expend on the unadvertised items once at the store. This aggressiveness therefore translates into lower retail mar-gins on these selected items since the retailers expect that consumers, once inside a store, will buy non-advertised products as well on which the retailers make money. Thus manufacturers, who are more adept at using pull strategies to enhance the popularity of their product, obtain a significant competitive advantage vis-a-vis others. The positioning of the product and the image conveyed through advertising act as drivers in creating this advantage which results in higher wholesale prices that these manufacturers can charge the retailers (Lal and Narasimhan, 1996). The cost of acquiring new customers usually far exceeds the cost of retaining an existing customer. As a result, customer retention has become a managerial strategy that has spurred interest in understanding and implementing store-loyalty programs (Agustin Singh, 2005; Carter, 2008; Pan Zinkhan, 2006; Reichheld, 1996; Reichheld Sasser, 1990; Sheth Parvatiyar, 1995). That is why retailers are the most important link between the company and the customers.Manufacturer advertising also affects prices and margins at both the retail and wholesale levels. The relationship between prices as well as margins at the retail and wholesale levels can be found in the economics literature (see, e.g., Ferguson 1982 or Pindyck and Rubinfeld 1989), where it has been argued, based on the theory of derived demand, that the movements of prices and margins at the retail and wholesale level are necessarily perfectly correlated. In other words, if advertising leads to increased market power through produ ct differentiation, both wholesale and retail prices in-crease, leaving both manufacturers and retailers with higher margins; or if advertising leads to increased price sensitivity through reduced perceived product differentiation, both wholesale and retail prices decrease, leaving both manufacturers and retailers with lower margins. In contrast, Steiner (1973, 1978, 1984) has argued that it is possible that a manufacturers advertising can have opposite effects on wholesale price elasticity and retail price elasticity, implying that margins can move in opposite directions. However, he does not offer a formal model of manufacturers and retailers to support his arguments. Source: (Lal and Narshimhan, 1996) There is scant empirical literature on the effects of advertising on margins. In Table 1, Lal and Narasimhan (1996) summarised the evidence presented in the literature on the negative association between manufacturer advertising and retail margins. Reekie (1979) shows that manufacturers advertising and retail margins are inversely related in a cross-sectional study of many categories. Farris and Albion (1987) find that in many nondurable consumer good categories, higher brand advertising is associated with lower retail margins, though there were a few categories where the opposite is true. They also find that the negative relationship between manufacturer advertising and retail margins is strongest in categories with high penetration, non-food, and large category advertising budgets. Steiner (1973) uses data from the toy industry to conclude that the more popular toys (i.e., the more heavily advertised) yield lower retail margins. Finally, using data at the four-digit SIC level, Nels on (1978) finds that there is a negative association between manufacturer advertising and retail margins. The reader is also referred to Steiner (1993) for some anecdotal evidence from different industries on the inverse association between manufacturers advertising and re-tail margins. Support for positive association between manufacturer advertising and wholesale margins is provided in Quelch et al. (1984) and Narasimhan (1989a). Note that all these studies are cross-sectional and all these studies have focused on either the whole-sale margin or the retail margin. The one exception is Steiner (1991), who documents, using data from the toy industry, that higher levels of manufacturer advertising are associated with higher wholesale margins while leading to lower retail margins. Taken as a whole, these studies demonstrate that in general, higher manufacturer advertising leads to higher wholesale margins and lower retail margins, though the effect at the retail level is less systemat ic. Thus we see that in contrast to the standard economic arguments, there is empirical evidence to suggest the possibility of an inverse relation-ship between wholesale and retail margins. The objective in this chapter is to revisit thisproblem and offer a formal model to explain how the margins at the retail and wholesale level can be negatively related. It shows that if a manufacturer can affect the intensity of retail competition, it can increase its wholesale price while at the same time exert downward pressure on retail margins. Furthermore, It demonstrates that if manufacturer advertising can enhance the attractive-ness of the brand as shown in Boulding et al. (1994) (resulting in a higher willingness to pay or increasing aggregate demand for its product), manufacturers brand advertising can increase the intensity of competition at the retail level. Finally, it is shown that even if there is competition at the wholesale level, a manufacturer with a more popular or well-positi oned brand can use advertising to increase profits. The intuition behind our result is the following. First, it should be noted that retailers selling a large assortment of goods cannot advertise the prices of all goods. Moreover, retailers need to advertise the prices of some goods in order to make it worthwhile for consumers to shop at the store. Hence consumers make store choice on the basis of advertised prices and expected prices for goods bought on a shopping trip. Given the fact that retailers charge and consumers expect to pay a higher price for the unadvertised goods, and consumers prefer one-stop shopping due to transportation costs, any effort by the manufacturer that affects the proportion of consumers who decide to shop at a retail store for any given difference in the retail price of the advertised good would lead to an increase in the intensity of retail competition. Such actions by the manufacturer would lead to lower retail margins. At the same time such actions can also increase the wholesale price and manufacturers margins since these actions allow the manufacturers to recover some of the rents derived by the retailer on the unadvertised good. In other words, since the retailers make a higher margin on the unadvertised good, any action by the manufacturer that affects the size of these profits to the retailers allows the manufacturer to wield more power and set higher wholesale prices. We show that if manufacturer advertising leads to lower price sensitivity or increase in aggregate demand, an increase in such advertising would result in lower margins for the retailers and higher margins for the manufacturers. It should also be noted that while our work is silent on the exact role of manufacturer advertising, Kaul and Wittink (1995) report that one empirical generalization from past studies is that an in-crease in non-price advertising leads to lower price sensitivity among consumers. Finally, it is important to recognize that our result is shown to exist in a context where retail advertising has no impact on the demand of the advertised brand, and that our result would not exist in the absence of the composite good. Moreover, the inverse relationship be-tween wholesale and retail margins can exist only for goods/brands where the retailer reveals price via advertising(Lal and Narasimhan, 1996). Previous research in the area of store loyalty focuses on customer satisfaction as a major predictor of loyalty (Bloemer Kasper, 1995; Brown, 2004; Cronin Taylor, 1992; Garbarino Johnson, 1999; Reichheld, 1996; Sawmong Omar, 2004; Taylor Baker, 1994). However, many companies rated high on customer satisfaction indexes showed poor financial performance (Buttle, 1999; Passikoff, 1997). There is evidence supporting high rates of defection among satisfied customers across many industries (Buttle, 1999; Jones Sasser, 1995). Thus, the ability of customer satisfaction reliably and accurately to predict loyalty has not been unambiguously established (Higgins, 1997). Clearly, the development and implementation of successful store-loyalty programs would benefit from a better understanding of loyalty, its antecedents and its consequences (Ray and Chiagouris, 2009). It is evident from the above discussion that satisfied and happy retailers would ultimately lead to increased sales. Higher m argin per product or total income of retailers from a particular product would to happy retailers. From the above discussion it is clearly evident that If the company spends heavily on advertisement of on its product, it will increase total sales, which means it will ultimately more margin on total sales and in this way the company can make happy its retailers.The PepsiCo spends heavily in India for its Pepsi Soft Drink, much more than its nearest rival Coca-Cola (PepsiCo, Annual Report,2010).These heavy advertisements have a significant positive impact on the total sale of its soft drink over last year. It is a clear sign of happy retailers who are gaining low margin per bottle of Pepsi but in total higher revenue from its total sales. To check the planogram (POG) norms, whether the retailers followed it properly or not There are many factors which are generally used to stimulate consumers purchases, including advertisement, product variety, layout of stores, merchandise appraising, services offered, and other marketing programs (Levy and Weitz, 1992) but space planning and store layout are one of the prime consideration (Yang, 2001). The layout of stores and proper space planning highlight the importance of improvement of the visual effect on the customers for shopping and the space productivity of retail stores (Yang, 2001). Planograms, typically,are used to display exactly where and how many items are physically placed onto which store shelves. Because of limited shelf space, planograms plays a vital role for the improvement of financial performance of the company in general and for retailer in particular (Yang, 2001; Yang and Chen, 1999). There are two ways for retailers to increase margin (Profit). They will have either increase sales or by reducing costs. Cost reduction is basically operational in nature. It heavily depends on technology, management of personnel and efficient inventory management. Generally increase in sales is market driven and can be categorised in to two different segments i.e., (i) in-store -tactics and; (ii) out-of-store tactics. Out of store tactics is used to attract more and more customers into the store while in-store tactics used to compel customers psychologically to buy as much as they can, when they enter into the stores (Dreze, Hoch and Purk, 1994). Previous Space Management Research In the field of Space Management, the impact on sales of space management is very limited because of high implementation cost. The existing work methods can be categorised into three different models- (i) Commercial Applications, (ii) Experimental Tests, and (iii) Optimization Model. In business literature, applications oriented approaches are preferred because of its simplicity and the easy operation. For example, PROGALY Model ((Dreze, Hoch and Purk, 1994). ) is generally preferred. In this model, space is allotted to a product in proportion of total sales. Cifrino (1963) and McKinsey (1963) argued for space with respect to Direct Product Profit (DPP). Rest of the models have concentrated on lowering the operating cost and minimising inventory and handling costs (Cifrino, 1963). Planogram Integrity: A serious Issue There are many retailers who have recognised the importance of proficiently exploit their customer services in times of intense competition. Confronted by the amplified pressure of fee discounters and the rise of a price war between supermarkets organisation on the one hand and the companies on the other hand since 2003, Indian Retailers want quality in their operations to endure large collection at reduced profit margins (PepsiCo 2009). Thus, balancing inventory and renewal costs, given a collection of wide range of products and the corresponding shelf space at the retail stores is rally an important task. Retailers aim at exploiting availability of the products in the collection at a marginal cost of operations. These objectives have to be attained on the shelves, where a particular product meets its customers. The amount of shelf space allocated to a product is thus primarily a consequence of marketing decisions: i.e., the merchandising category to which the product is assigned an d the allocated number of facings, which are the number of slots on the front of the retail shelf. This planogram on its turn govern the available shelf space for the operations. From both an operations as a marketing point of view, it is thought-provoking to scrutinise whether local managers are contrary from the planogram, to determine the grounds and to analyse the consequences (Woensel et al, 2008). Planogram integrity is the degree to which the planograms and its norms are followed in practice(Woensel et al, 2008). High planogram integrity stands for small/very little difference between planogram and the authentic situation in a store (Woensel et al, 2008). A planogram encompasses significant information for the accomplishment of operations. Generally, when creating planograms the retailers decides the collection composition, the location of products in the store and the amount of space apportioned to each product (Levy and Weitz, 1992). Figure of Planogram Woensel et al, (2008) have completed empirical research on the planogram and data collected for ten stores in India. During this collection period, the stores were not allowed to change their mode/style operations. Moreover, the days were carefully selected such that the period of measurement did not include any periods of expected demand peaks/drops (e.g. no holidays). The data were gathered for Pepsi soft drink only. Woensel et al, (2008) observed that collection in the stores seems to be reasonably different from the one identified in the planograms. The main driver for this was identified to be the possibility to locally add or drop items from the collection. Also, categories with a larger collection seem to be more prone for abnormalities than one with smaller collections. This designates the drawbacks of managing these huge collections with composite swap relationships. On the locational level, it seemed that the abnormality is small (for the common collection in both actual situations versus planogram). The common of abnormalities could be linked back to facing differences. The foremost cause is due to the different shelving in practice than the one used in the planogram. Finally, also considerable differences between the stores exist; some store managers follow the norms provided by the company for the planograms very closely; other store managers do not take it seriously. The Root causes for erroneousness were typically associated to the local store management. Another vital issue is the acceptance time required for updating the shelves following the changes in the planograms(Woensel et al, 2008). Over and above these is no proper processes for controlling these messages was available to all stores, leading thus to a serious issue with planogram integrity. Furthermore high levels of inaccuracy in the real realizations are also ascribed to the lack of incentives from the headquarters for enforcing the planograms. Generally, it is witnessed that the inaccuracy of the planograms is correlated to the regularity, the timing and/or the type of changes in the planograms. Of course, one should not overlook the strain in the following the planogram closely. Because of repeated introductions or de-listing of products and changes in style and pack size or the turnover of a product, frequent changes in the planograms are needed(Woensel et al, 2008). Without a detailed plan to implement the changes in the planograms, they might be postponed, not implemented in full or the local management already anticipated the changes before the company conversed with them(Woensel et al, 2008). It can be concluded that planogram integrity is a vital issue that requires a retailers management consideration. Woensel et al, (2008) shown clearly that common of differences relate back to facing differences. The second important issue is collection and display of products and third issue locational differences. From the above discussion, one can find four main drives for these differences, (i) Local Store Management, (ii) a substantial acceptance time for changes, (iii) diverse local situations that presumed in the planogram and (iv) lack of incentive from the company. The foremost consequence of a lack of planogram integrity proved to be a significant loss of effectiveness both in marketing strategy as in the operational executions, as such indicating that planogram integrity is a serious issue The Impact of Visual Merchandising on the Consumer Decision Process Introduction McGolddrick (1990, 2002) argued that Visual Stimulation and communication are very important facets of retailing. This interest in the visual has combined to form the exercise of visual merchandising. This is demarcated as the à ¢Ã¢â€š ¬Ã‚ ¦ activity which coordinates effective merchandise selection with effective merchandise display (Walters and White, 1987, p. 238). Consequently, Visual merchandising is apprehensive with both how the product and/or brand is visually communicated to the customer and also whether this message is decoded appropriately in this context affecting a positive psychological or behavioural outcome, ultimately leading to purchase (Kerfoot, Davies and Ward, 2003). The significance of accomplishing such a consequence has meant that within the retail environment, various procedures have been used to exhibit, merchandise and communicate products. This diversity in visual merchandising procedures has conceivably also stemmed from the vast collection of goods and services that are sold by retailers. The progress of merchandising procedures and the proliferation of these methodologies among retailers have been well-established history. Baum (1987) accepted the significance of window display long back in 1897. Baum who was the founding editor of  The Show Window  ,where he offered strategies for effective window displays where he provided an early mechanism for the dissemination of visual merchandising best practice. This early publication evolved to examine display across the store and continued to offer advice for some considerable time (Law and Yip, 2004). The potential of display and visual merchandising is so strong that a publication solely addicted for visual merchandising and display stated in 1922 with the title Visual Merchandise and Store Display.   Nevertheless, the prominence of visual merchandising has been not acknowledgedmuch consideration in the academic world and in literature (Lea-Greenwood, 1998). The most notable exception has been within the US fashion-based literature, where a number of texts have been devoted to the subject. These though are primarily practitioner-based, highlighting again a deficiency of attention from retail academics. This study represents a small step towards addressing this lack. It investigates the influence of visual merchandising stimuli within the retail store environment on customer perceptions and responses. In doing this, the research is focused on the potential psychological and behaviour outcomes that result from customer interaction with visual merchandising, rather than directly trying to establish what constitutes best practice  per se  or manipulating visual merchandising techniques themselves. This soft drink and FMCG retail sector has been chosen as it has recently elevated visual merchandising to an issue of board level concern (Lea-Greenwood, 1998). The sector offers an ideal background in which examination of the impact of product display and visual merchandising can be conducted on customers, as the degree of retailer complexity in this area is likely to be higher than that demonstrated by companies in other sectors. Sproles (1979) has focused on the procedure, such as the effects of communication channels in current society, the characteristics and the functional purpose of soft drinks. However, Hart and Dewsnap (2001) also established a decision-making model to explain the behaviour of consumers through visual merchandising and store display. It was revealed form their study that there were interweaved a complicated set of interlinked aspects to affect decision making on intimate soft drink, and amount the factors, brand loyalty tended to be the repeatedly adopted factor to curtail the decision-making process and the degree of apparent risk while shopping intimate soft drink. Speaking from the View-points of marketing and consumer behaviour, the two models are adequate to explain the corresponding phenomenon (Kerfoot, Davies and Ward, 2003). However, viewing from the retailing aspect, the environment of stores can increase consumers response (it may be positive of may be negative) to a brand of the product being sold in the store. To achieve a positive store environment, visual merchandising has been widely adopted by retailers (Kerfoot, Davies and Ward, 2003). Likewise, intimate soft drink has been going through a series of Soft drink treatments in recent years. Examples can be found in contemporary intimate soft drink brands, such as Coca Cola and Pepsi, Sprite and so on. Instead of targeting different customer segments by adding advanced functions to products, intimate soft drink brands try to establish a distinctive image in consumers mind. In this study, focus is put on the influence of visual merchandising on store atmosphere and its corresponding impact on consumer decision making process for intimate soft drink (Law and Yip, 2002). Dimensions of visual merchandising and display Omar (1999) advocates that there are three types of interior display- (i) architectural display (ii) merchandise display and (iii) point-of-sale display. This study efforts on merchandise display; the choice of a singular store to deliver the stimulus photographs minimises the architectural elements; additionally, point-of-sale areas were omitted from the photographs to guarantee only merchandise display was considered(Kerfoot, Davies and Ward, 2003). The most important aspects within merchandise display have been acknowledged within the academic literature as: packaging (Bruce and Cooper, 1997; Da Costa, 1995), layout, (Levy and Weitz, 1996; Berman and Evans, 1995), colour (e.g. Koelemeijer and Oppewal, 1999), fixturing (Levy and Weitz, 1996; Donnellan, 1996), merchandise (Davies and Ward, 2002), presentation techniques (Buchanan  et al., 1999), and so on. These areas have received varying degrees of attention as separate elements. Nevertheless, in fact, there is tiny work has been done that makes these aspects composed as merchandise display(Kerfoot, Davies and Ward, 2003). The examination of Influences, that such display creates on consumers, especially in term of brand communication and purchase intention, are lacking in terms of literature. Though, several of the elements of merchandise display have been scrutinised from an environmental psychology approach, as well as from a service environment perspective. These two relat ed literatures provide potential starting points as each considers the physicality of the in-store environment and its influence on customers (Kerfoot, Davies and Ward, 2003).. Literature Review Visual Merchandising is one of the most significant constituents in atmospheric management(Kerfoot, Davies and Ward, 2003). It embraces the interior of stores as well as the exterior of stores.The exterior of store comprises retail premises, window display, and facade while the interior of store embraces fixtures and fittings, store layout, and store highlights as well as wall display(Kerfoot, Davies and Ward, 2003).There are many constituents who governtogether store exterior and interior and it embraceslighting design, colour co-ordination, selection of mannequin and the application of design principles(Park et.al., 1986). A good assortment of visual merchandising with comprehensive consideration of proper cooperative expressions is very important, if retailers really want to project the best side of their company/store (Kerfoot, Davies and Ward, 2003). Consequently, customers could receive the envisioned message of stores or retailers through several different types of themes sty les designed especially from suitable visual merchandising strategy and for influencing buying decisions and behaviours in a positive sense. Conclusively, visual merchandising helps to establish the complete image of a retail store in the mind of consumers(Park et.al., 1986). Kerfoot, Davies and Ward (2003) acknowledged that visual merchandising has many objectives, (i) Retail Identity Building in the mind of customers, (ii) influencing customers final decision to buy as many products as he/she can afford inside a store (iii) last but not the least, to increase overall sales. Visual merchandising pays its attention on numerous facets of customers, which include affective pleasure, sensory pleasure and cognitive pleasure (Fiore, Yah and Yoh, 2000). Sensory part contains personal feeling of customers, such as response to temperature and noise, feeling crowded in a store (Ko Rhee, 1994; Hornik, 1992 and Grossbart et. al 1990). Store-related and product associated information can also be assimilated from storeenvironment (Baker et. al 1994), for example, searching a product that enhances ones self-concept (Kleine III et al., 1993). Also, window display plays a critical role in affecting store entry decisions as it is a very important information cue for consumers (Bettman et. al, 1998) There are many schools of thoughts regarding consumer decision process. The process of diffusion can affect consumptions response to different product attributes (Mitchell and Creatorex, 1990). The selection of promotional channels and the format of transition are the best examples. Similarly, there were other thoughts regarding general consumers decision making process. For Rogers model (1962), decision making was not longitudinal but rather cross-sectional. Following Rogers thought, Robertson (1971) developed a conceptual model with eight procedures (awareness, comprehension,problem perception, attitude, trail, adoption, legitimation, and dissonance). Nevertheless, Sproles (1979) established a specific framework for visual merchandising with ten procedures. The key focus of Sproles model was the relationship between the influences of communication channels in current society and the functional purpose of soft drink objects. Hart and Dewsnap (2001) conducted a specific study on deci sion process of purchasing intimate soft drink. His findings revealed that consumers had to go through a set of interlinked factors or relied on brand loyalty. In the light of the criteria, self-concept, perceived risk and consumer involvement were also critical in shaping the final decision (Law and Yip, 2004). While reviewing the current trend of intimate soft drink brands, being functional is the fundamental requirement of consumers, adding extra value to products is regarding as the selling point. In terms of functional aspect, mint flavour or Diet Pepsi using consumer care can be found in triumph brand. In times of readymade food and soft drink, almost every brand is using the same stuff. For example Pepsi introduced the Diet Pepsi, in the same year Coca cola introduced the diet version (PepsiCo, 2010). They introduced in the name of consumer health and family sentiments. Though, there is very few research about the inter- relationship between the importance of store aesthetics and consumer decision process, as a result, the purpose of this study is to look into this precise affiliation (Law and Yip, 2004). The study is beneficial to retailers who are newly established or re-position in the intimate soft drink market. As mentioned, for consumers who have a high degree of brand loyalty, external factors such as store atmosphere, may not has a great impact on decision process. But, if consumers rely on peer influence, advertising or have no idea about a brand, visiting the store is the first contact with the brand. Having attractive human-like mannequins of film starts or popular sportsman/woman and matching with style and appeal can break the decision process (Law Yip, 2004). Customers attention can be provoked at the stage of responsiveness but in a negative way due to the social and cultural constraint. Therefore, it is difficult to continue the decision process from awareness to interest. Hart and Dewsnaps (2001) study on consumer decision process for visual merchandising delivers a critical direction for pre-purchase evaluation. Paying a close attention to the interaction of cultural or societal difference and visual merchandising elements causes a great impact on final purchase decision. To find out the influence made by Pr

Corrosion Audit :: essays papers

Corrosion Audit 1.Introduction: Corrosion is the electrochemical deterioration of a metal because of its chemical reaction with the surrounding environment. While new and better materials are continuously being developed, this progress is offset, in part, by a more aggressive operational environment. This problem is compounded by the fact that corrosion is a complex phenomenon. It can take many different forms and the resistance of materials to corrosion can drastically change with only a small environmental change. Corrosion is most often thought of as a slow process of material deterioration, taking place over a significant period of time (examples being general corrosion, pitting, exfoliation, etc.). Other forms of corrosion degradation can occur very quickly, in days or even hours, with catastrophic results. These forms (such as stress corrosion cracking, environmental embrittlement, and corrosion fatigue) depend on both the chemical and mechanical aspects of the environment and can cause catastrophic structural failure without warning. Some of the data of losses due to corrosion follows. In the United Kingdom the Paint Research Association has estimated that metallic corrosion costs developed countries some up to four per cent of gross national product (GNP) annually. In the UK this would equal about  £30 billion. In the United States, various reports put the cost of corrosion slightly higher at four to five per cent, equating in that country to about US $300 billion, of which it is claimed that around one-third could be prevented. In India approximately 5% of the GDP is lost due to corrosion, of which again it is claimed that around one-third could be prevented. CORROSION AUDIT: There is no clear definition of corrosion audit. It mainly contains inspecting the corrosion sites, analyzing the reasons of corrosion, suggesting methods of prevention, doing the cost analysis of prevention and losses due to corrosion. 2.Main Materials Used in IITK: ï‚ · Centrifugally cast iron (CI) ï‚ · Galvanized iron (GI) ï‚ · Steel ï‚ · Stainless steel ï‚ · Cast iron ï‚ · PVC (Poly venyl chloride) ï‚ · RCC (Reinforced concrete council) Centrifugally cast iron vs. Galvanized iron: CI is more resistant to corrosion in soil and water environment as compared to GI. But CI cannot be threaded much frequently, as it will corrode very fast near the threads and thus will lead to breakage and leakage. So CI is used only, where long pipes are needed. For small length pipes, like those in houses, GI is the better option.

Tartuffe: Truth and Religious Teachings

Dana Epstein Professor Morris ENG 2850 TR54C October 13, 2009 The Illusions That Define Us: Appearance versus Reality â€Å"Men in general judge more from appearances than from reality. All men have eyes, but few have the gift of penetration. † That quote by Nicollo Machiavelli is simply defined as, what you see is not always what you get and few men have the gift of being able to see through an appearance. In Tartuffe and Monkey, appearances are far from reality in many instances. Even though both texts were written in different milieus both societies focus strongly on religion and material value.Both characters are deceived by power, desires and the need to prove themselves. Spiritually is used to enlighten and religious teachings help Monkey to see the truth. However, Orgon needs to trust his senses because spirituality is used to deceive. The realization that is difficult for the audience to distinguish the difference between appearance and reality in both stories is very evident. In Tartuffe, Orgon is deceived by the holy zealous Tartuffe solely based on his false piety of religion. His need for power and prestige blinds his ability to see the truth about Tartuffe.He is so enthralled by Tartuffe because he enriches Orgon with power by appealing to his desires. Tartuffe is claiming to be a traditional figure of authority by presenting himself as a holy man and Orgon foolishly goes against everyone’s feeling towards Tartuffe and falls for his act. The audience is not told that Tartuffe is a liar or hypocrite but, through his words and the actions that follow, it allows the audience to differentiate between the lying Tartuffe and the honest family. In the first scene, Dorine states her feelings toward Tartuffe. You see him as a saint. I'm far less awed; In fact, I see right through him. He's a fraud. † Tartuffe, the hypocritical fraud, does no appear until act three, allowing the audience to see the other characters as honest witnesses to Tartuffe lies. As soon as he arrives, he over zealously informs Dorine that she is showing too much cleavage. His actions are seen as forced rather than genuine. Orgon is so blinded by Tartuffe that he does not even believe his own son when he tells him that Tartuffe is trying to seduce his wife Elmire.Orgon responds with â€Å"Ah, you deceitful boy, how dare you try to stain his purity with so foul a lie? † Orgon finally needs to perform a scientific experiment by hiding under the table to actually hear Tartuffe try and seduce his wife. Orgon’s mistake is that he needed to trust his senses rather then his spirituality and need to prove himself. His desire to be all powerful Orgon and control his children’s lives ended him in a bind where all his belongings were in the hands of Tartuffe. Orgon was deceived by religion and his desires to be all knowing and all powerful.The appearance of a â€Å"holy man† that Tartuffe presented completely blinded the reali ty that he was a con artist. Orgon chose to go against the intuitions of those he loves and trusts and is left struggling to define his own reality and truth in what spirituality means to him. The religious teachings and spirituality in Tartuffe leave Orgon to pick up the pieces of his fallen life and proves that trusting his senses was the key to defining reality. On the contrary, the religious teachings in Monkey help him to see the truth and define reality.Monkey’s journey consisted of many encounters where appearance is deceiving. The evil wizard is one of the most deceiving characters throughout the story. Through changing his appearance, he is able to disguise his true self as a lion of the gods to complete his task in teaching the king a lesson for being unkind to a beggar who was asking for help. The evil wizard pretended to help the king of the Crow-Cock Kingdom but instead shifts his form into the king and steals his throne. When Monkey confronts the evil wizard abo ut this change he then again shifts his form into Tripitaka so that Monkey cannot attack him.Through these appearances, the evil wizard was able to hide the reality that he was truly a lion on a mission. Though the evil wizard was one of the most manipulative characters, Pigsy and the Dragon both deceived reality with their appearances. Pigsy fooled those of the woman he married into believing he was a hard working young man, but once his true identity of a pig was known they soon became fearful of him. Another instance was when the white dragon was punished for eating the white horse so he was then transformed into Tripitaka's white horse for the journey.The appearances that deceived were all to complete their own missions and ultimately teach a lesson. Throughout the stories Monkey by Wu Ch`eng-en and Tartuffe by Jean-Baptiste Poquelin Moliere, appearance versus reality is a key theme. The audience can see the demise that Tartuffe had in store for Orgon all along. As for Monkey, t he reality throughout the story is layered between illusions and the supernatural, reality and truth. Both characters were deceived by opposite forces in which the quest for power and to meet their desires blinded their inability to decipher truth from false.